What Happened

An individual U.S. lawful permanent resident, whom OFAC identifies only as “U.S. Person-1,” has agreed to pay $1,427,230 to settle 39 apparent violations of U.S. sanctions on Iran. Between June 2019 and July 2021, U.S. Person-1 advised the management of one of Iran’s leading software companies, had Iranian dividends paid into their U.S. bank accounts, and bought real estate in Iran. OFAC investigated and resolved the case together with the FBI’s Los Angeles Field Office, through its Orange County Resident Agency.

The relationship dates to 1987, when U.S. Person-1, then living in Iran, co-founded an Iranian software company that OFAC calls Iranian Company-1. After that company became publicly listed in Iran in 2011, U.S. Person-1 co-founded a second Iranian company, a holding company OFAC calls Iranian Company-2, to keep their ownership stake in the first.

Iranian Company-1 has since become one of Iran’s leading software providers. Its products cover finance, administration, human resources, logistics, and management for industries central to Iran’s economy, among them petrochemicals, pharmaceuticals, construction, and agriculture. Its customers also include government agencies, universities, research centers, and state-owned enterprises.

U.S. Person-1 kept up their ties to both companies for many years. Between July 2019 and October 2020, they took part in 19 virtual meetings with senior personnel of the two companies. The other participants included directors and officers of Iranian Company-1, among them its Chief Executive Officer (who had co-founded the company with U.S. Person-1), the Chairman of its Board of Directors, and an employee who served as Board Secretary.

The meetings covered a wide range of company business, from corporate transactions and asset management to sales, marketing, accounting, human resources, corporate governance, and overall strategy. U.S. Person-1 drafted the agenda for some of the meetings and contributed substantive advice, analysis, and information throughout. OFAC treated this participation as the provision of management consulting and advisory services to the Iranian companies.

Separately, between June 2019 and August 2020, U.S. Person-1 had their dividends from the Iranian companies wired into U.S. banks on 16 occasions. The transfers passed through banks in third countries such as Türkiye, the United Arab Emirates, and Singapore before reaching accounts in U.S. Person-1’s name. In total, U.S. Person-1 received $713,615 in dividend payments.

In or after 2021, U.S. Person-1 used the proceeds of other dividend payments to buy four properties in Iran for relatives living there. In 2022, they gave up their ownership interest in the Iranian companies.

U.S. Person-1 was aware of U.S. sanctions on Iran the whole time. In 2000, while an executive of Iranian Company-1 in Iran, they co-wrote an article in a leading newspaper about Iran’s digital revolution and the challenges the sanctions program posed for Iran’s information technology sector.

OFAC sent U.S. Person-1 an administrative subpoena in January 2025, and the initial response was incomplete. In July 2025, OFAC issued a second subpoena, citing the gaps in the first response. U.S. Person-1 then provided a complete response.

Altogether, OFAC grouped the conduct into three kinds of apparent violations. U.S. Person-1 provided management consulting and advisory services to Iran 19 times. On 16 occasions, they caused U.S. banks to indirectly export financial services to Iran by processing Iranian-origin dividends. They also bought real property in Iran with Iranian-origin dividends four times.

OFAC cited three provisions of the Iranian Transactions and Sanctions Regulations (ITSR) for this conduct. Section 560.203 prohibits causing a violation of any of the ITSR’s other prohibitions, as well as evasion, attempted violations, and conspiracies. Section 560.204 bars the export of goods, technology, or services to Iran from the United States or by a U.S. person. Section 560.207 prohibits new investment in Iran by U.S. persons.

The release appears to pair the first two types of conduct with the wrong provisions. It lists the consulting, the dividends, and the property purchases in that order, then cites Sections 560.203, 560.204, and 560.207 “respectively,” which would tie the consulting to Section 560.203 and the dividends to Section 560.204. The fit runs the other way. A U.S. person advising Iranian companies is exporting services to Iran, which is what Section 560.204 prohibits, while causing U.S. banks to export financial services falls under Section 560.203’s ban on causing violations. The property purchases line up correctly with Section 560.207.

The Penalty

OFAC found that the violations were egregious and that U.S. Person-1 had not voluntarily disclosed them – a combination that puts a case in the most serious of the four categories OFAC uses to set a starting penalty.

Under OFAC’s Economic Sanctions Enforcement Guidelines (31 C.F.R. Part 501, Appendix A), that category produced a base penalty of $14,730,300 for this case. OFAC treated all 39 violations together as a single egregious case, so the release doesn’t break the base penalty down by type of violation.

The release calls this figure the “applicable schedule amount,” which appears to be a drafting error. Under the Enforcement Guidelines, the schedule amount is the starting point for non-egregious cases that weren’t voluntarily disclosed. For an egregious case like this one, the starting point is the statutory maximum, which under IEEPA is currently $377,700 per violation, or twice the transaction value if that is greater. Multiplying $377,700 by the 39 violations gives exactly $14,730,300. Nor could the figure be a schedule amount, since the schedule reaches $377,700 only for transactions of $200,000 or more, and the 16 dividend payments, which totaled $713,615, can’t all have been that large.

The violations took place between 2019 and 2021, when the IEEPA maximum was lower, but using today’s figure is correct. Since the Federal Civil Penalties Inflation Adjustment Act was amended in 2015, each inflation adjustment applies to penalties assessed after it takes effect, even when the underlying violation happened earlier, as long as the violation occurred after November 2, 2015.

The final settlement of $1,427,230, roughly a tenth of the base penalty, reflects OFAC’s weighing of the General Factors in its Enforcement Guidelines.

Aggravating factors

• U.S. Person-1 violated U.S. sanctions willfully and over a period of years. They knew Iran was under sanctions and that their activities there were prohibited. Even so, after becoming a U.S. lawful permanent resident, they kept a significant ownership stake in both Iranian companies, advised the companies on their Iranian operations, and carried out financial and commercial activity in Iran from the United States.
  • General Factor A, Willful or Reckless Violation of Law: This factor asks whether a person acted knowing the conduct was against U.S. law, and whether the violations formed a pattern or were isolated. Both counted against U.S. Person-1, whose conduct was deliberate and continued over several years across several types of activity.
• U.S. Person-1 had actual knowledge of each part of the conduct. By taking part in the meetings, they knew they were advising companies organized and located in Iran, and as a co-founder of Iranian Company-1, they knew the work related to services performed inside Iran. They also knew the dividends were Iranian in origin, including the money paid into their U.S. accounts and the money used to buy property in Iran.
  • General Factor B, Awareness of Conduct at Issue: The more a person actually knew about the conduct behind a violation, the stronger OFAC’s response. Here the knowledge was firsthand, not a matter of warning signs someone should have caught.
• U.S. Person-1’s services undermined the goals of the Iran sanctions by giving an economic benefit to Iran’s largest software company and, indirectly, to the many private and public sector organizations it serves. Iranian Company-1’s software supports enterprise resource planning for national and regional government bodies, universities, research centers, and state-owned enterprises.
  • General Factor C, Harm to Sanctions Program Objectives: This factor measures the economic benefit that conduct gives a sanctioned country. Here the benefit reached beyond a single company into Iranian government agencies and state-owned enterprises.
• U.S. Person-1 is a sophisticated businessperson who spent decades working in Iran’s information technology sector, and they were aware of how U.S. sanctions affected that sector.
  • General Factor D, Individual Characteristics: OFAC weighs a person’s commercial sophistication and experience. A long career in the same industry whose sanctions problems U.S. Person-1 had written about counted against them.
• U.S. Person-1’s cooperation with OFAC was unsatisfactory at first. They cooperated adequately and answered OFAC’s questions only after OFAC issued a second subpoena.
  • General Factor G, Cooperation with OFAC: This factor looks at whether a person provides all relevant information and responds promptly to requests. An incomplete response that took a second subpoena to correct fell short on both counts.

Mitigating factors

• U.S. Person-1 had not been the subject of any OFAC enforcement action in the five years before the earliest transaction at issue.
  • General Factor D, Individual Characteristics: A person’s sanctions history over that five-year window is part of this factor. A clean record generally qualifies as a “first violation,” which can reduce the base penalty by up to 25 percent.
• U.S. Person-1 stopped the conduct before receiving OFAC’s subpoena, and had given up their shares in the Iranian companies years before learning of OFAC’s investigation.
  • General Factor F, Remedial Response: This factor considers whether a person stopped the conduct at issue. U.S. Person-1 had already ended the conduct years before OFAC made contact.
• OFAC considered U.S. Person-1’s inability to pay a larger settlement, which they proved to OFAC’s satisfaction with extensive and detailed supporting documentation.
  • General Factor D, Individual Characteristics: This factor includes a person’s overall financial condition. Here that condition limited how large a settlement U.S. Person-1 could pay.

What are the Takeaways?

OFAC’s prohibitions apply to all U.S. persons, and that includes lawful permanent residents (green card holders). Like most OFAC programs, the Iran sanctions program defines a U.S. person to include any U.S. citizen or permanent resident, wherever they are located (31 C.F.R. § 560.314). When U.S. Person-1 moved to the United States, they took on the same compliance obligations as any other U.S. person.

Keeping up business relationships with people in Iran is risky. The Iran prohibitions are broad and generally bar any direct or indirect dealings, including providing or receiving personal services. Unless OFAC has issued a license, a U.S. person who helps manage the affairs of a business in Iran, or in any other sanctioned jurisdiction, is almost certain to violate sanctions.

Cooperating promptly and fully with an OFAC investigation matters. OFAC considers how well a subject cooperates when it decides how to resolve a case and how large a penalty or settlement should be. Timely, thorough cooperation shows that the subject takes their sanctions compliance obligations seriously. It also saves OFAC time and resources by letting it finish the investigation efficiently.

Cooperation that falls short carries two risks. The subject can lose the mitigation credit that good cooperation would have earned, and can also face separate penalties under OFAC’s Reporting, Procedures and Penalties Regulations (31 C.F.R. Part 501).

Other resources

OFAC’s May 2019 publication, A Framework for OFAC Compliance Commitments, gives the agency’s view of the essential components of a sanctions compliance program. It is aimed at organizations subject to U.S. jurisdiction, and at foreign companies that do business in or with the United States or U.S. persons, or that use goods or services exported from the United States. The Framework also explains how OFAC may factor those components into its evaluation of apparent violations and its settlements, and an appendix analyzes some of the root causes of apparent violations that OFAC has identified in its investigations.

OFAC’s website offers other resources for sanctions implementation and compliance, including guidance for specific industries, instructional videos, answers to frequently asked questions, and tools for searching OFAC’s sanctions lists.

The rules for the civil penalties process are in the regulations for each sanctions program, the Reporting, Procedures and Penalties Regulations (31 C.F.R. Part 501), and the Enforcement Guidelines (31 C.F.R. Part 501, Appendix A). OFAC keeps these references, along with recent civil penalties and enforcement information, on its civil penalties and enforcement page.

Separately, Treasury’s Financial Crimes Enforcement Network (FinCEN) runs a whistleblower incentive program covering violations of OFAC-administered sanctions, other violations of the International Emergency Economic Powers Act, and violations of the Bank Secrecy Act. Whistleblowers in the United States or abroad may be eligible for an award if their information leads to a successful enforcement action with monetary penalties over $1,000,000. The program covers information about potential violations in any commercial sector.

and here is the text of the enforcement release: